The US administration’s tariff policies are reshaping global trade dynamics, triggering uncertainty across industries. For the IT services market, this means supply chain disruptions, delayed hardware projects, and cautious enterprise spending. Yet, amid volatility, digital transformation remains a strategic imperative. Enterprises embracing cloud, artificial intelligence (AI), and automation are better positioned to adapt swiftly and sustain operational agility in an increasingly complex environment.
For the IT services market, the direct impact of tariffs, once it is in force, will be around the ability to source for hardware in the US as well as the price increase. Projects that involve IT hardware may also face delays due to disruption. More crucially, businesses that are most impacted by uncertainties will curtail spending and future investment. This will result in a cut back on discretionary spending and this will indirectly impact IT services providers as some projects will be delayed or shelved.
Siow Meng Soh, Research Director, Technology at GlobalData says: “The silver lining is that companies have already started to see the long-term benefits to transform their business using digital solutions, and this trend will continue. Companies that transform their businesses using digital solutions including cloud and AI will be better positioned to weather the storm.”
While helping enterprise customers to navigate the challenges resulting from the tariffs, IT services providers can focus on the use of technology to drive operational agility. For example, the use of cloud services can mitigate the challenges related to hardware cost and supply-chain disruptions, while giving businesses the ability to scale up/down according to the demand. Businesses can also look to deploy agentic AI solutions to reduce the cost of delivering business process services and produce better business outcomes for customers.
There will also be varying impact across industry sectors, and different digital solutions can be applied for each sector. For example, a key motivation of the tariffs is to drive domestic reindustrialization in the US. This will lead to more manufacturing investments in the country but there will be heavy reliance on technologies to maintain competitive instead of developing labor-intensive factories.
Soh concludes: “Robotics, AI (including computer vision), data analytics, Internet of Things (IoT), and edge computing will be some of the key technologies driving process automation. Service providers that have a strong focus on the manufacturing sector should proactively reach out to clients to discuss the importance of these technologies. During uncertain times, competition will become more intense. IT services providers need to develop outcome-based contracts instead of competing on price.”
